Market Review - 19/08/2014 22:06GMT
U.S. dollar rises broadly on robust housing starts
The single currency remained under pressure on Tuesday and euro tumbled to a fresh 9-month low at 1.3313 on dollar's broad-based weakness in part due to the release of upbeat U.S. housing starts and building permits data together with the modest rise in the consumer price index. German 10-year bond yields were hovering near 1.0 percent, just above record lows hit at the end of last week.
U.S. consumer price index (CPI) edged up 0.1 percent last month as declining energy costs partially offset increases in food and rents. The CPI had increased 0.3 percent in June. U.S. housing starts surged 15.7 percent last month to a seasonally adjusted 1.09 million annual unit pace, after two straight months of declines, adding speculation that U.S. economy is picking up.
The greenback maintained a firm undertone due to dollar's broad-based strength on improved risk appetite together with the rise in global equities. Despite dollar's brief retreat from Asian high at 102.65 to 102.53 in European morning, the pair ratcheted higher and penetrated last Fri's high at 102.72 on dollar's strength elsewhere after the release of upbeat U.S. housing starts n building permits together with the modest rise in U.S. CPI data.
Cable fell to a fresh 4-month low of 1.6612 on Tuesday after the release of U.K. July CPI which came in at -0.3% m/m, lower than street forecast of -0.2% whilst Jul annual inflation also lower at 1.6% versus forecast of 1.8% and previous reading was 1.9%. The data have dashed expectation of a possible rate hike in November or December later in the year.
In other news, New Zealand Finance Minister Bill English said New Zealand economy still growing robustly, outlook not changed significantly from budget; New Zealand government surplus seen at NZ$297 million in 2014/15 versus NZ$372 million in budget; NZ has limited fiscal headroom for higher spending, tax cuts, spending restraint will remain; NZ national government to hold to economic/fiscal policies, tax cuts possible when room to do so; NZ does not need tax hikes nor sharply higher government spending in parties' election promises.'
Wednesday will see the release of RBA’s Stevens testimony, Japan’s exports, imports and trade balance, Australia’s Westpac leading economic index, Japan’s all industry index, Germany’s producer prices, BOE’s meeting minutes and CBI trend, Canada’s wholesale trade and U.S. FOMC minutes.
U.S. dollar rises broadly on robust housing starts
The single currency remained under pressure on Tuesday and euro tumbled to a fresh 9-month low at 1.3313 on dollar's broad-based weakness in part due to the release of upbeat U.S. housing starts and building permits data together with the modest rise in the consumer price index. German 10-year bond yields were hovering near 1.0 percent, just above record lows hit at the end of last week.
U.S. consumer price index (CPI) edged up 0.1 percent last month as declining energy costs partially offset increases in food and rents. The CPI had increased 0.3 percent in June. U.S. housing starts surged 15.7 percent last month to a seasonally adjusted 1.09 million annual unit pace, after two straight months of declines, adding speculation that U.S. economy is picking up.
The greenback maintained a firm undertone due to dollar's broad-based strength on improved risk appetite together with the rise in global equities. Despite dollar's brief retreat from Asian high at 102.65 to 102.53 in European morning, the pair ratcheted higher and penetrated last Fri's high at 102.72 on dollar's strength elsewhere after the release of upbeat U.S. housing starts n building permits together with the modest rise in U.S. CPI data.
Cable fell to a fresh 4-month low of 1.6612 on Tuesday after the release of U.K. July CPI which came in at -0.3% m/m, lower than street forecast of -0.2% whilst Jul annual inflation also lower at 1.6% versus forecast of 1.8% and previous reading was 1.9%. The data have dashed expectation of a possible rate hike in November or December later in the year.
In other news, New Zealand Finance Minister Bill English said New Zealand economy still growing robustly, outlook not changed significantly from budget; New Zealand government surplus seen at NZ$297 million in 2014/15 versus NZ$372 million in budget; NZ has limited fiscal headroom for higher spending, tax cuts, spending restraint will remain; NZ national government to hold to economic/fiscal policies, tax cuts possible when room to do so; NZ does not need tax hikes nor sharply higher government spending in parties' election promises.'
Wednesday will see the release of RBA’s Stevens testimony, Japan’s exports, imports and trade balance, Australia’s Westpac leading economic index, Japan’s all industry index, Germany’s producer prices, BOE’s meeting minutes and CBI trend, Canada’s wholesale trade and U.S. FOMC minutes.
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